Get 40% Off
🚨 Volatile Markets? Find Hidden Gems for Serious OutperformanceFind Stocks Now

Oil prices edge up on signs of tightening market

Published 2017-10-19, 08:37 p/m
Updated 2017-10-19, 08:40 p/m
© Reuters.  Oil prices edge up on signs of tightening market

* Crude fell the previous day after traders took profits

* Global refiners import U.S. oil to make up for OPEC cuts

By Henning Gloystein

SINGAPORE, Oct 20 (Reuters) - Oil markets edged up on Friday, recovering some of the previous day's losses, as analysts pointed to signs of a tightening market.

Brent crude futures LCOc1 , the international benchmark for oil prices, were at $57.31 at 0027 GMT, up 8 cents, or 0.1 percent, from their last close.

U.S. West Texas Intermediate (WTI) crude futures CLc1 were at $51.41 per barrel, up 12 cents, or 0.2 percent.

The slightly higher prices came after bigger falls in the previous session, which market watchers put down to profit-taking following four days of straight gains, as well as the notion that the risks to supplies due to fighting between Iraqi government forces and Kurdish militia were overblown.

"Reports that there has been little damage to oil infrastructure in Kurdistan did see some of this week's geopolitical risk premium unwound," ANZ bank said on Friday.

Analysts also said there were indicators of a tightening market.

U.S. commercial crude oil stocks have dropped 15 percent from their March records, to 456.5 million barrels, to below levels seen last year. C-STK-T-EIA

Part of this drawdown has been due to rising exports as a result of the steep discount of WTI crude to Brent, which makes it attractive for American producers to export their oil. CL-LCO1=R

RBC Capital Markets said, "A strong indicator that global inventories are being run down will be when the market starts relying on U.S. exports to fill deficits."

3rd party Ad. Not an offer or recommendation by Investing.com. See disclosure here or remove ads .

That moment may have arrived.

Shipping data in Thomson Reuters Eikon shows that overseas U.S. crude oil shipments have soared from virtually zero before the government loosened export restrictions in late 2015 to around 2.6 million barrels per day (bpd) in October.

Exports were further boosted since a production cut led by the Organization of the Petroleum Exporting Countries (OPEC) has been in place since January this year.

"Physical bottlenecks are unlikely to kick in until waterborne (U.S.) exports approach 3.2 million bpd," RBC Capital Markets said.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^ GRAPHIC: U.S. crude oil exports

http://reut.rs/2l3sb52 GRAPHIC: U.S. commercial crude oil inventories

http://reut.rs/2l0KlUR

^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.